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Trading on the forex market

Trading on the forex market

Learn Forex for Beginners – How to Trade, Costs, and Tips

Learning forex aims to find out the ins and outs of foreign exchange or what is popularly known as foreign exchange alias foreign exchange.

Learning forex is different from trading in forex. At the learning stage, you are not necessarily trading in forex, especially for beginners.

Before you jump directly into this risky investment, you need to know the meaning of forex, the benefits, the market, how it works, the advantages vs the risks, to the fees charged by the broker.

After that, there is some knowledge that investors at every level must cultivate from beginners to pros. Let’s not be curious, let’s look at the most complete and latest reviews about learning forex for beginners below.

What is forex?

Forex is an acronym or abbreviation of foreign exchange which means the exchange of foreign currencies. The general term or another name for forex is foreign exchange (forex).

When discussing forex, it means the comparison of the value of a country’s currency with other countries. For example, the rupiah (IDR) with the US dollar (USD).

Well, in the world of forex there is something called forex trading. For those of you who want to learn forex, you must know what trading is in the forex world.

Forex trading is a transaction of buying and selling currencies. So, this trading can be your opportunity to invest. The profit is from the difference between the buying and selling prices of the currency.

In online forex trading, you can make transactions anytime and anywhere for a full 24 hours, Monday-Friday.

Forex market characteristics

The forex market has two characteristics that distinguish it from the stock market. Here’s a brief explanation:

  1. Over-the-counter (OTC) is a transaction that is only carried out by two parties, namely investors or traders with brokers. In the stock exchange, transactions are carried out by three parties, namely investors, brokers, and stock exchanges.
  2. There is no exchange of goods where forex traders only see the price difference. This is different from the stock exchange, which buys shares to be deposited in a custodial bank.

How forex trading works

Similar to the simple principle of stock trading, buy when prices are low and sell when prices are high. Likewise, how forex trading works.

The reason is, traders take advantage of the price difference. Then how to determine forex prices? Here are things you want to know about how forex trading works:

1. Pair or currency pairs

In the world of forex, the price that becomes the benchmark is the exchange rate of a pair of currencies. The term is called a pair. So, there must be a currency exchange rate pair that is a trading reference. Currently, there are 47 currency pairs from various countries around the world in the forex market.

2. Open buy and open sell

What are open buy and open sell? Open buy and open sell positions are actually when the trader expects one of the currency pairs to strengthen and the other to weaken. Of course, this aims to predict the benefits that will be obtained.

3. PIPs for your reference

In the world of forex, price movements are called PIPs. Well, this PIP is an important reference that you must understand. Especially when you are learning forex.

So, this PIP becomes one of the main things in calculating the profits and losses in trading. PIP refers to the four decimal places behind the comma of the exchange rate.

For example, the price of Eur/USD buy is 1.1511, so the PIP is 1511. If the value of Eur/USD drops to 1.1509 from the previous price, it is read as moving 2 PIP.

Advantages and risks

What are your opportunities as a forex trader? So what is the risk of loss? The right trading can lead you to money. If it is wrong, it can bring losses.

Let’s look at the following reviews so that you are ready to become a trader!

Forex trading advantages:

Here are the potential advantages of investing in forex.

  • Can start with limited capital because there is leverage & contract size
  • Can be done from anywhere and anytime (online and market 24 hours x 5 days open)
  • Practical with auto-trading feature
  • You don’t have to be online all the time because it can be used as a side job
  • Relatively low cost
  • Provide additional income
  • Before jumping into the market, you can practice with a demo account first.

Forex trading risks:

Here are some things that are forex risks and you need to be aware of.

  • Tempted by leverage or the facilities provided by the broker
  • Wrong choice of broker. Could be unregistered and illegal
  • Currency volatility.

Are you ready to become a trader?

Costs to know

If the selling price of your foreign currency is higher than the purchase price, have you made a profit? Not necessarily, yes! You need to calculate the fees charged for trading.

Here are the costs you need to know:

  • Spread is the difference between the buying price and the selling price.
  • Withdrawal fee is the cost of withdrawing funds from the account.
  • The overnight fee is the interest on the leveraged money that you borrow from the broker. This interest is set per day.

Forex brokers

In the forex market, there are so-called forex brokers, namely parties who will help you “navigate” the ups and downs of the market. That’s why you can’t just choose a broker arbitrarily.

Make sure your broker is registered and licensed by CoFTRA. Before deciding on your preferred broker, make sure to find out its legality.

Not only about trading, but learning forex also leads you to be careful in choosing a good broker.

Forex investment advantages

The forex market has various advantages that are useful for those of you who are learning forex and becoming a trader. Here’s a brief review:

1. Market conditions are very liquid

There are many market participants from various countries. So, not only traders or investors and brokers but also corporations that make forex transactions every day. That’s because this market is very liquid and has the potential to benefit traders by buying and selling forex.

2. Big profit potential

Why can forex have the potential to make big profits? This is because there are the following factors:

  • Leverage where you can trade in large amounts with minimum capital. So, you can “get a loan” from a forex broker for your trading.
  • High volatility in the forex market is indeed a bit scary because it can really go up, or it can drop right away. However, both of them open their profit opportunities. When it falls, you can buy it at a low price and make a big profit when the price is exorbitant.

3. Can sell and buy currency

If in stocks you have to buy stocks first before selling, in the forex market this is not the case. You can buy and sell at the same time. This means that you don’t have to have goods to be able to sell in the market.

4. Small capital

The existence of leverage in the forex market makes the capital to invest smaller and affordable, but you can buy in large quantities.

For example, there is a stockbroker A that only sets a minimum capital of US $ 25. However, investors can make transactions of up to US$1,000.

Learn forex for beginners to pros

For those of you who want to learn forex, here are various classifications of knowledge that you must know. Those of you who are still “green” with the forex world, learn from forex science for beginners, forex basics, forex for advanced, and forex for pros.

Here’s the review:

1. Learn forex for beginners

Beginners who learn forex do not need to trade immediately. Beginners should at least know the basics in forex, such as understanding forex, business legality, to basic technical analysis.

By having this foundation, those of you who want to trade in forex will understand the opportunities and potential losses. Come on, see the following reviews of learning forex for beginners.

1. Get to know forex

Forex is an acronym or abbreviation of foreign exchange which means the exchange of foreign currencies. The general term or another name for forex is foreign exchange (forex).

What do you need to know to learn forex? Check out the following.

  • Buying and selling in forex trading
  • The object of trading is the currency being traded, including USD, EURO, JPY, GBP, and AUD. You also need to know what each currency is called.
  • Leverage & contract size
  • Transaction direction
  • The trading time is 24 hours because each market time zone depends on the country’s clock i.e. New Zealand, Tokyo, London, and New York.
  • How to trade forex.

2. Business legality

Learning forex is not just knowing about trading, you need to know for sure whether the business or investment to be followed has a clear legal umbrella (legal aspect) or not.

This forex business is regulated by Law Number 10 of 2011 concerning Amendments to Law Number 32 of 1997 concerning Commodity Futures Trading.

So, futures trading activities in Indonesia or more popularly known as trading have a strong legal basis.

All futures trading activities are supervised by the Commodity Futures Trading Regulatory Agency (BAPPEBTI), which is an agency under the Ministry of Trade of the Republic of Indonesia.

3. Basic technical analysis

Technical analysis will help you identify the nature of forex price movements in the market. There are three ways to analyze this movement, namely:

  • Market Action Discounts Everything
  • Prices Move In Trend
  • History Repeats Itself.

2. Learn forex basics

Even deeper than learning forex beginners there are materials that you can learn. If you already understand the material for beginners, you can continue to learn the basics of strategies that you can apply when trading.

Here are the basic strategies in trading that you can learn:

  • Trendline Strategy
  • Fibonacci Retracement
  • Moving Average
  • Bollinger Bands
  • Commodity Channel Index
  • Stochastic Oscillator
  • Relative Strength Index (RSI)
  • MACD.

3. Learn an advanced forex

After understanding the two levels of forex learning earlier, you can deepen the advanced material which consists of the following two strategies.

1. Candlestick Pattern

The Candlestick Pattern is popular with many traders because it shows the price. Visually, candlestick charts are easy to understand and the information presented in each candlestick is quite complete including the opening price, low price, high price, and closing price.

2. Price Pattern

Price Pattern is a pattern that arises from price movements that occur in the forex and commodity markets where certain patterns will reappear.

In forex and commodity trading, the term History repeats itself, which means history repeats itself.

By studying and recognizing Price Patterns, you can predict the next price movement when a pattern appears.

4. Learn forex for pros

You’re in pro class! In this forex learning section, there are four things you should know.

Two of them in the forex learning category for pros are trading psychology and risk & money management.

If you are finished with the previous three materials, let’s look at four things about learning forex for pros:

  1. Integrating indicators helps find perspective in price movements
  2. Build a trading plan
  3. Have financial and risk management
  4. Trading psychology.

Forex investment tips for beginners

After knowing the various sciences for learning forex, you can apply the following forex investment tips:

  1. Understand forex trading rules such as trading hours to fees charged.
  2. Learn forex analysis techniques which consist of three techniques, namely market sentiment analysis, fundamentals, and technicals.
  3. 3. Choose the right and legal broker, this is to avoid losses and ease in trading.
  4. There is nothing wrong with joining the trader community.

Know your investment risk profile

In addition to the tips above, you also need to know your investment risk profile. This does not only apply to foreign exchange investments.

About Author: Muh Ikhsan

Forex Signal 30 is the best forex system since 2009 and has been used by thousands of traders from around the world to generate profit in forex trading. This system is created by our team of Brilliant Forex Signal Team, this system is made as simple as possible for beginner and professional traders.

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